The movement of fluid and solutes between the vascular, interstitial, cellular and alveolar compartments in response to hydrostatic pressure and osmotic alterations in the pulmonary blood is under study in both in vivo isolated perfused dog lung preparations and in vitro. These studies indicate that the reflection coefficients of small solutes such as sodium chloride, sucrose and urea are approximately 0.3 across the barriers separating the pulmonary tissue and blood. The flow of tissue fluid following injections of hypertonic solutions of these solutes is only 20 percent that anticipated from studies with corresponding changes in hydrostatic pressure. The fluid extracted from the lungs by these solutions is hypotonic, containing less than 25 percent of the osmotic concentration of the plasma. These observations support the lipid-aqueous parallel pathway model of transcapillary exchange. Hypertonic solutions of sucrose and sodium chloride also serve to impair the movement of red cells through the pulmonary capillaries, apparently because of a consequent loss of red cell deformability.